Molecular cloning of a full-length cDNA for human lysosomal acid lipase/cholesteryl ester hydrolase (EC 3.1.1.13) reveals that it is structurally related to previously described enteric acid lipases, but lacks significant homology with any characterized neutral lipases. The lysosomal enzyme catalyzes the deacylation of triacylglyceryl and cholesteryl ester core lipids of endocytosed low density lipoproteins; this activity is deficient in patients with Wolman disease and cholesteryl ester storage disease. Its amino acid sequence, as deduced from the 2.6-kilobase cDNA nucleotide sequence, is 58 and 57% identical to those of human gastric lipase and rat lingual lipase, respectively, both of which are involved in the preduodenal breakdown of ingested triglycerides. Notable differences in the primary structure of the lysosomal lipase that may account for discrete catalytic and transport properties include the presence of 3 new cysteine residues, in addition to the 3 that are conserved in this lipase gene family, and of two additional potential N-linked glycosylation sites. Transfection of the cDNA into Cos-1 cells resulted in the expression of acid lipase activity with the substrate range of the native enzyme at a level that was greater than 40 times the endogenous activity.